MasterCard is believed to be investing $20m in
the creation of its own Russian processing centre as authorities
seek to restrict domestic card payment processing.
The proposed legislation, which is currently
under consideration by the State Duma, aims to bring a halt to
Russian card payment processing taking place abroad. The changes
are claimed to be designed to protect financial and national
security.
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Russian publication Vedomosti cited a
source close to the system and several bankers as confirmation that
MasterCard is already in the process of building a processing
centre and is prepared to pay out $20m to keep a solid presence in
Russia – almost half the network’s annual profit in the
country.
Visa has no plans to follow in its rival’s
footsteps, telling Vedomosti it is waiting for Russia’s
national system law to be passed before it decides how to do
business in the country.
The legislation forms part of a set of
amendments relating to Russia’s planned switch to a national
payment and universal electronic card system in 2012. Announced in
2009, the project aims to see all Russian citizens carrying a
single payment and national ID card.
The expected cost of the new card scheme
ranges widely between industry insiders. Economic Development
Minister Elvira Nabiullina told Vedomosti the cost will be
around R165bn ($5.8bn) while German Gref, president of Sberbank –
the principle stakeholder in the universal electronic card –
projects the cost to be as high as R450bn.
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